Ethanol Producer's Magazine

August23, 2018

Office of Sen. Patty Murray

Aug. 23, U.S. Sens. Patty Murray, D-Wash.; Roy Blunt, R-Mo.; Heidi Heitkamp, D-N.D.; and Chuck Grassley, R-Iowa, led a bipartisan group of 35 other senators urging the U.S. EPA to increase volume obligations for biomass-based diesel and advanced biofuel and ensure any small refiner economic hardship exemptions are appropriately accounted for in its final rule for the Renewable Fuel Standard. The EPA’s June 2018 proposal would raise the biomass-based diesel volume for 2020 to 2.43 billion gallons and increase the advanced biofuel volume for 2019 to 4.88 billion gallons.

“While these proposed increases are encouraging, these volumes continue to underestimate the existing potential of the biodiesel and renewable diesel industries in our states,” the senators wrote. “We believe the biodiesel industry can do more and that EPA should demonstrate more confidence in the RFS program’s ability to drive growth. Increasing biomass-based diesel and advance biofuel volumes would encourage investment in capacity and new fuel development. Further, EPA must accurately account for small refiner economic hardship exemptions in the final rule. … It is critical that EPA appropriately account for any small refiner economic hardship exemptions that it reasonably expects to grant during the 2019 compliance year in the final rule, or EPA will not be able to fulfill its duty to ensure RVOs are met.”

As the senators noted in their letter, every 500 million gallon increase in biodiesel production supports an estimated 16,000 jobs.

The senators continued, “We have made great progress through the RFS in diversifying our nation’s fuel supply while creating and sustaining jobs, strengthening local economies, generating tax revenues, and improving energy security. We urge you to continue to increase annual RVOs for biomass-based diesel and advanced biofuels and to ensure that, once set, the annual RVOs are fully met.”

We write in response to the Environmental Protection Agency's (EPA) proposed Renewable Volume Obligations (RVOs) for advanced biofuel for calendar year 2019 and biomass-based diesel for calendar year 2020. We appreciate that the proposed volumes acknowledge the U.S. biodiesel industry's demonstrated production capacity, which supports jobs and economies in rural communities across the nation. However, the proposal fails to include the necessary signals that EPA will ensure the annual RVOs are fully met. Therefore, we urge you to address this shortcoming in the final rule.

Biodiesel is the first EPA-designated advanced biofuel to reach commercial scale production nationwide . The biodiesel industry has met and exceeded the goals that Congress envisioned when it created the Renewable Fuel Standard (RFS) with bipartisan support. Additionally , biodiesel has consistently made up the majority of the annual advanced biofuel volumes. This ability to meet or exceed RVOs coupled with the substantial investments made by the biodiesel industry indicate that biodiesel can continue to grow in the near future. Importantly, every 500 million gallons of increased biodiesel production supports roughly 16,000 jobs, according to estimates.

EPA's proposal would raise the biomass-based diesel volume for 2020 to 2.43 billion gallons and increase the advanced biofuel volume for 2019 to 4.88 billion gallons. While these proposed increases are encouraging, these volumes continue to underestimate the existing potential of the biodiesel and renewable diesel industries in our states. We believe the biodiesel industry can do more and that EPA should demonstrate more confidence in the RFS program's ability to drive growth. Increasing biomass-based diesel and advance biofuel volumes would encourage investment in capacity and new fuel development.

Further, EPA must accurately account for small refiner economic hardship exemptions in the final rule. The proposed rule indicates EPA has not granted any such hardship exemptions for 2019 and therefore did not consider exemptions in the proposed volumes. EPA reportedly granted an unprecedented number of these exemptions for 2016 and 2017. It is estimated that these retroactive exemptions have reduced biomass-based diesel demand by almost 300 million gallons. It is critical that EPA appropriately account for any small refiner economic hardship exemptions that it reasonably expects to grant during the 2019 compliance year in the final rule, or EPA will not be able to fulfill its duty to ensure RVOs are met.

We have made great progress through the RFS in diversifying our nation's fuel supply while creating and sustaining jobs, strengthening local economies, generating tax revenues, and improving energy security. We urge you to continue to increase annual RVOs for biomass-based diesel and advanced biofuel and to ensure that, once set, the annual RVOs are fully met.